Evan Thompson is a Washington-based writer for TBS covering higher education. He has bylines in the Seattle Times, Tacoma News Tribune, Everett Herald, and others from his past life as a newspaper reporter.
When the coronavirus shut down in-person college classes this spring, no one could have predicted the consequences for higher education institutions.
As COVID-19 wreaks havoc across the country, the possibility of an outbreak at Salve Regina University keeps school President Kelli Armstrong awake at night.
"This virus is unpredictable," she said. "What if there's a massive outbreak that would shut us down? I do not want that to happen to our community. We owe it to students to try to provide a safe as possible experience."
Operating in a pandemic will prove tricky to even the most nimble institutions. Salve Regina's small student body and relatively isolated campus will make it easier to keep the pandemic at bay than at denser, more urban schools.
But even here, safety protocols are extensive. Students will wear masks, monitor their temperatures, and rotate between online and in-person classes to limit the number of people sitting in a room. Some will live in hotel rooms to avoid overcrowding the dorms. The dining hall will have new seating to facilitate proper social distancing.
All of these adjustments cost money. Salve Regina expects to pay more than $2 million to outfit classrooms and other facilities with technology and safety equipment. They plan to hire more kitchen and maintenance staff to ramp up cleaning and sanitization. Armstrong also expects that the coronavirus tests they'll provide students and staff will be another seven-figure expense.
Yet despite these costs and significant health risks, Salve Regina plans to reopen in the fall. Like the vast majority of colleges in the United States, Salve depends significantly on a steady stream of enrollments and the tuition that comes from it.
"A full semester with absolutely no tuition would be pretty devastating," Armstrong said.
The Trump administration is pushing college and state leaders to reopen campuses this fall, despite the pandemic. President Donald Trump has even threatened to withhold federal funding unless they comply.
There are no good options for administrators trying to balance the financial health of their institutions and the physical well-being of everyone on campus. Concerns about the pandemic, economic crisis, and uncertainty on campus may push some students to take a gap year or put their education on hold. Meanwhile, an enrollment decline and the accompanying loss of tuition revenue will severely burden institutions already operating on very fine margins.
Need for Tuition Revenue Hurts Colleges
Across the industry, tuition revenue will likely plummet in the fall because of COVID-19. A recent report by Fitch Ratings predicts enrollment will drop 5-20%. Much of that will stem from incoming freshmen opting to delay their enrollment: A study by Art & Science Group estimates that about one in six high school seniors will ultimately change their plans to attend college.
What does this mean for colleges and universities?
Most public and private schools rely heavily on tuition revenue to stay afloat. If enrollment suddenly drops across the country, many schools will find themselves in a dangerous financial situation; some will likely close their doors.
"The basic business model for most colleges and universities is simple — tuition comes due twice a year at the beginning of each semester," Brown University President Christina Paxson wrote in a New York Times column. "Remaining closed in the fall means losing as much as half of our revenue."
This is especially true for private schools, which do not receive state funding. Private colleges like Brown generally rely on student fees to pay for operational costs. They also draw from charitable donations and their endowments. Brown's endowment, for example, is $4.2 billion — about four times its operating costs during the 2019-2020 school year.
But most schools don't have a billion dollars socked away for a rainy day. The median endowment among all ranked institutions was $65.1 million in 2018, according to U.S. News. Some schools are sitting on less than $1 million.
Salve Regina's operating cost in 2019-2020 was $75 million. But the school's endowment — a pool of financial investments that are generally set aside for future expenses but can be used as collateral — is about $70 million.
Operating Cost vs. Endowments (2019-2020)
$1.2 billion operating cost
$4.2 billion endowment
Salve Regina University
$75 million operating cost
$70 million endowment
Brown University, Salve Regina University
"If we decided to shut down completely, charge nothing, our endowment would be eaten up pretty quickly, which I think would be true of most places," Armstrong said
Public universities are in trouble, too. Before the 2008 recession, public colleges generally received most of their financial support from states. But in recent years, most states have slashed their higher education budgets.
According to the Center on Budget and Policy Priorities, state spending on higher education in 2018 was down nearly $6.6 billion from its pre-recession peak. To stay afloat, colleges have increased tuition, reduced faculty, and limited their programmatic offerings.
"States have many budget priorities, and often higher education is the first place to be cut," said Robert Anderson, president of State Higher Education Executive Officers Association.
As the economy improved over the last decade, a few states — like California, New York, and Oregon — restored the recession-era cuts. But others — such as Arizona, Alabama, and Louisiana — trimmed funding even further.
By 2019, tuition dollars accounted for more than 50% of the total revenues at colleges in half the states.
Consequently, Paxson believes higher education is on the verge of collapse if campuses don't reopen.
"This loss, only a part of which might be recouped through online courses, would be catastrophic, especially for the many institutions that were in precarious financial positions before the pandemic," she said. "It's not a question of whether institutions will be forced to permanently close; it's how many."
Colleges Must Weigh Risks of Returning to Campus
Colleges and universities operate in challenging financial circumstances in the best of times. COVID-19 has made the job significantly harder and forced administrators to make tough choices as they try to weigh the risks of opening their campuses.
Hundreds of schools have already vowed to hold classes on campus in the fall. Some have outlined phased approaches that will slowly populate campuses with students, faculty, and staff.
These plans — which follow guidelines from public health organizations — include measures for social distancing, isolating on-campus students who test positive, and disinfecting areas to reduce exposure to COVID-19.
But every open campus is a potential transmission hotspot. Some plans have already run into logistical hurdles and early signs indicate that keeping students healthy will be a tall order. The feasibility of the University of Alabama's plan, for example, is dependent on the availability of testing.
Already, dozens of football programs across the country have reported coronavirus cases among players since workouts began in early June. The risk of transmission will only increase as more and more students return and start socializing.
Some administrators are even openly acknowledging the likelihood of transmission on their campuses. Michigan State University President Samuel Stanley acknowledged that the coronavirus will spread when students return to campus, but he argued that it's a chance worth taking.
"The one thing that's going to be really important, then, is confidence in our students, faculty, and staff, and their willingness to abide by a number of the things we're going to be asking them to do on campus," Stanley said in USA Today.
Changing student behavior will be critical to any plan to limit the spread of the virus. Most schools will require their students to wear masks in public places, isolate themselves at the first sign of infection, and minimize unnecessary social contact.
Jim Purcell, executive director of the Alabama Commission on Higher Education (ACHE), said colleges should be transparent about the risks of returning to campus.
"That's what parents and students are looking for: an honest statement of what's happening," he said. "Honesty is always the best policy."
He also added, "The biggest concern on campuses is how well students will self-enforce social distancing."
Purcell said proposals should include plans for monitoring health conditions on campus, containment protocols, and how to quickly pivot classes online if the virus spreads out of control.
"They need to outline in detail what they're going to do so people coming back can make an informed decision," Purcell said.
The challenges will vary from college to college. At commuter schools, such as the City University of New York (CUNY), handling the virus will be much more complicated than on small, rural campuses. Harry Blain, a Ph.D. candidate who teaches political science at CUNY's City College, said many of his students could be at risk commuting with public transportation.
"Even if you have social distancing, 10,000 hand sanitizers everywhere you walk on campus, and masks, the vast majority of the students are commuting anyway," he said. "So unless you clean the subway and make it good for social distancing, it's a non-starter."
Blain's concerns aren't just about his students. He also worries about the others who will be exposed to the virus if campuses reopen unsafely: office staff, lab technicians, librarians, janitors, and cooks.
Blain is a member of the Professional Staff Congress, or PSC/CUNY, a union that represents more than 25,000 faculty and staff at CUNY and the CUNY Research Foundation. The organization is currently bargaining with the school system to implement procedures that protect their health.
"There are so many staff at CUNY who keep the institution ticking," he said. "I am ready with all of my colleagues at the Graduate Center, and hopefully elsewhere, to make sure we don't make the staff the canaries in the coal mine."
The coronavirus has already hit the school system hard. At least 30 people affiliated with CUNY have died from the virus.
Issues with Remote Learning Prompt Speedy Return
Colleges and universities abruptly shifted to a remote learning model earlier this year, and the transition was turbulent for students and faculty members alike.
Many professors had never taught an online course before, and students across the country found themselves unprepared for the format. Other common challenges included internet connectivity issues and restrictions on lab work. The experience led many students to call for tuition refunds and incentivized universities to resume in-person classes.
"The obvious shortfall is that it [online education] can't recreate a person-to-person experience," Blain said. "And it can't recreate all of those things that are very important for a well-functioning class: the ability to read the room, the ability to pick up on facial expressions and reactions and all of that, which, in my mind at least, is really essential to good teaching."
Blain felt that he adapted well online, but added that he doesn't have the training to teach remotely. If campuses remain closed, will he and professors be coached on how to improve?
"There's a big question going forward about what kind of training teachers are going to have when they're teaching online," he said. "That's probably going to vary from campus to campus. In my case, it went well. I had Blackboard Collaborate, which was a good program. And my students showed up to every class. We had good discussions. I thought it was probably better than I expected. From them, though, I heard that that was not a universal experience, by any means — that the quality of online teaching varied drastically for them."
Jon Hegglund, an associate professor of English at Washington State University (WSU), thrives on face-to-face interaction with students in classrooms. Like Blain, he had to change his teaching style when classes moved online quickly.
Hegglund is hopeful WSU will reopen in the fall because infection rates are low in the rural college town of Pullman. He plans to split his classes with half online, half in-person instruction.
If online-only classes are necessary for the fall, he expects there will be some hitches, but they will only be temporary.
"There are still going to be things that don't quite work," he said. "We just have to realize this is not going to be a permanent state of affairs. We'll be doing the best we can. Students understand the modifications that have to be made."
Pandemic Causes Deep Budget Deficits
Many colleges went into debt as soon as they moved classes online and closed residence halls. Iowa State University, for example, returned nearly $17 million in refunds for auxiliary services to students and families in April. The refund is, in part, why the university expects to have an $88 million deficit next academic year.
Predictions for this fall are grim seemingly everywhere.
The University of Kentucky projects a $70 million shortfall, while the University of Michigan expects to lose between $400 million and $1 billion this year across its three campuses. The nine state universities in Massachusetts have lost a combined $35 million since the crisis began.
The coronavirus will severely test each college's financial resilience, said Carlos Santiago, the commissioner of the Massachusetts Department of Higher Education (MDHE).
"That loss of revenue goes to the bottom line of the institution," he said. "It's a bleak environment."
The financial hits have forced some colleges to take cost-saving measures, including furloughs, staff cuts, and hiring freezes. Others, however, have managed to freeze tuition to lighten the financial burden on students and families.
But the deep revenue losses since the crisis hit will make recovery an uphill battle.
"They're stuck with huge liabilities," Santiago said. "A lot of them are going to have to tap into reserves as much as possible."
There are secondary consequences to budget shortfalls as well. Institutions that have lost revenue and have limited liquidity could soon have lower credit ratings. That means they would have to borrow money at a higher cost to pay for infrastructure upgrades and other amenities that can drive enrollments.
Economies Could Suffer from Higher Education's Struggles
Colleges and universities play an enormous economic role in local communities. A 2018 analysis concluded the University of Notre Dame in Indiana pumped $2.46 billion into the regional economy and supported 16,700 jobs. The University of Massachusetts system is the state's third-largest employer, with a workforce of 18,000 that contributes $7.5 billion to the economy each year.
Rural college towns tend to have lower unemployment rates as well.
In 2017, The Atlantic reported that Corvallis, the home of Oregon State University, had an unemployment rate of 3%, while neighboring rural cities had unemployment rates of 4.8%. Similarly, the unemployment rate around the University of Nebraska in Kearney was 2.5%, while the rest of the state had a 3.4% unemployment rate.
Jed Kolko, an economic researcher for Indeed.com, also found a link between growing populations and college graduates. According to Kolko, non-metropolitan counties with growing populations also have 30% college graduates or more, while shrinking populations often have comparatively few graduates.
Santiago said the surrounding community's desire for a well-educated labor force might influence what colleges and universities decide to do.
"It's one factor that would push institutions to reopen," Santiago said.
Financial Support for Colleges May Dwindle
Federal aid has helped offset some revenue losses. The CARES Act — a federal stimulus bill passed soon after the COVID-19 outbreak — set aside $14 billion for higher education institutions, nearly half of which was earmarked for students specifically. The remaining money helped public and private colleges operate through the spring.
But the American Council on Education (ACE), a nonprofit organization that represents 1,700 colleges and universities, stated in a letter to Congress in April that the funding was insufficient in the long run.
ACE estimated schools would lose $23 billion in tuition revenue in the coming academic year. The expected loss for auxiliary services, such as housing and meal plans, adds up to another $11.6 billion.
"The amount of money for students and higher education institutions contained in the CARES Act does not come close to filling the gap," ACE wrote. "College and university leaders are fully expecting significant, potentially unparalleled, declines in enrollment, both from students who do not come back, and those who will never start."
Making matters worse, other funding resources for public and private colleges may dry up. Despite the unsustainable financial situation, Santiago said most public colleges should expect less state funding because of the pandemic. They may also see smaller endowments and fewer charitable donations because of economic hardship and a falling stock market.
College leaders will have to plan around various unknowns — tuition revenue, enrollment, state funding, endowments, donations, public health — as they decide whether to open in the fall.
"That uncertainty is what everybody is facing," Santiago said. "It's what we could call risk management."
Colleges across the country are combatting enormous challenges from both an economic crisis and a global pandemic. The coronavirus will make it difficult to operate in anything like a normal capacity, and administrators are well aware that it won't be easy to recreate the college experience in this environment. Armstrong, Salve Regina's president, said that's a paramount concern.
"I think it's going to be fascinating to see when we all open up, how it's working. How are we able to create community and continue with the work that we're doing as educators, despite all these restrictions?"
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